Napoleonic wars
Income tax was announced in Britain by William Pitt the Younger in his budget of December 1798 and introduced in 1799, to pay for weapons and equipment in preparation for the Napoleonic Wars. Pitt's new graduated (progressive) income tax began at a levy of 2 old pence in the pound (1/120) on annual incomes over £60 (equivalent to £6,719 as of 2021),[3] and increased up to a maximum of 2 shillings (10 percent) on annual incomes of over £200. Pitt hoped that the new income tax would raise £10 million, but receipts for 1799 totalled just over £6 million.[4]
Income tax was levied under five schedules. Income not falling within those schedules was not taxed. The schedules were:
- Schedule A (tax on income from United Kingdom land)
- Schedule B (tax on commercial occupation of land)
- Schedule C (tax on income from public securities)
- Schedule D (tax on trading income, income from professions and vocations, interest, overseas income and casual income)
- Schedule E (tax on employment income)
Later, Schedule F (tax on United Kingdom dividend income) was added.
Pitt's income tax was levied from 1799 to 1802, when it was abolished by Henry Addington during the Peace of Amiens. Addington had taken over as prime minister in 1801. The income tax was reintroduced by Addington in 1803 when hostilities recommenced, but it was again abolished in 1816, one year after the Battle of Waterloo.
Considerable controversy was aroused by the malt, house, windows and income taxes. The malt tax was easy to collect from brewers; even after it was reduced in 1822, it produced over 10 percent of government's annual revenues through the 1840s. The house tax mostly hit London town houses; the windows tax mostly hit country manors.[5]
https://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom
Considerable controversy was aroused by the malt, house, windows and income taxes. The malt tax was easy to collect from brewers; even after it was reduced in 1822, it produced over 10 percent of government's annual revenues through the 1840s. The house tax mostly hit London town houses; the windows tax mostly hit country manors.[5]
https://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom
The income tax was reintroduced by Sir Robert Peel in the Income Tax Act 1842. Peel, as a Conservative, had opposed income tax in the 1841 general election, but a growing budget deficit required a new source of funds. The new income tax of 7d in the pound (about 2.9%), based on Addington's model, was imposed on annual incomes above £150 (equivalent to £15,022 as of 2021).[3][6]
https://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom
The war (1914-1918) was financed by borrowing large sums at home and abroad, by new taxes, and by inflation. It was implicitly financed by postponing maintenance and repair, and canceling capital expenditure. The government avoided indirect taxes because they raised the cost of living, and caused discontent among the working class. There was a strong emphasis on being "fair" and being "scientific". The public generally supported the heavy new taxes, with minimal complaints. The Treasury rejected proposals for a stiff capital levy, which the Labour Party wanted to use to weaken the capitalists. Instead, there was an excess profits tax, of 50% on profits above the normal pre-war level; the rate was raised to 80% in 1917. Excise taxes were added on luxury imports such as automobiles, clocks and watches. There was no sales tax or value added tax. The main increase in revenue came from the income tax, which in 1915 went up to 3s. 6d in the pound (17.5%), and individual exemptions were lowered. The income tax rate increased to 5s. (25%) in 1916, and 6s. (30%) in 1918. Altogether, taxes provided at most 30% of national expenditure, with the rest from borrowing. The national debt soared from £625 million to £7,800 million. Government bonds typically paid 5% p.a. Inflation escalated so that the pound in 1919 purchased only a third of the basket it had purchased in 1914. Wages were laggard, and the poor and retired were especially hard hit.[7][8]
https://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom
No comments:
Post a Comment